Strong Prices And Weak Yuan Propel China’s June Aluminium Exports Higher

Strong Prices And Weak Yuan Propel China’s June Aluminium Exports Higher

Tariffs enacted this spring by the Trump administration and the resulting marketplace turmoil did little to diminish the output of aluminium smelters in the People’s Republic of China. Quite the opposite, as June saw China’s aluminium smelters combine to export over 500 thousand metric tons for just the second time in recorded history.

Per customs data released by Beijing late last week, the Middle Kingdom shipped 510 thousand metric tons last month, an amount of metal collectively worth around US$1.41 billion. June’s total is a 10.9-percent jump year-on-year from last June’s total of 460 thousand metric tons. It also eclipsed May’s revised total of 480 thousand metric tons, itself the second-biggest total since December 2014’s high-water mark of 542,700 tons.

Paul Adkins, managing director of consultancy AZ China, told Reuters that the calm domestic market and soft local currency yielded June’s results, and the same factors are likely to punch up July’s numbers as well.

Though many, if not most, aluminium commentators and stockholders have pointed the accusatory finger at China, the Trump administration’s blanket 10-percent import tariffs on the metal have done little but exacerbate the problem. Enacted on March 23, the tariffs have resulted in flooding of the aluminium market outside the United States, playing havoc with prices.

Massively unpopular since they were announced, the tariffs have disrupted supplies and threatened trade relationships around the globe. Several countries have already initiated complaints in global trade organizations, while several others have announced plans to go forward with unilateral reciprocal trade measures.

China has yet to endure appreciable damage due to the aluminium tariffs, but a new round of tariffs announced last week may well render a body blow to the country’s manufacturers, as the Trump administration has threatened to drop tariffs on US$200 billion in steel and aluminium imports from China. Beijing was quick to promise a swift and certain response.